September 28, 2009

From the Desk of State Representative Allen Vaught

On November 3rd the voters of Texas will have the opportunity to consider 11 proposed amendments to the state’s constitution. In this and the two subsequent editions of this column, I will provide background information on the amendments to encourage an informed trip to the voting booth. As we all know, a democracy rests upon the act of voting.

Proposition 1: Authorizing city and county financing to buy buffer areas near military installations

The proposition will read: “The constitutional amendment authorizing the financing, including through tax increment financing, of the acquisition by municipalities and counties of buffer areas or open spaces adjacent to a military installation for the prevention of encroachment or for the construction of roadways, utilities, or other infrastructure to protect or promote the mission of the military installation.”

Proposition 1 would authorize the Legislature to allow cities and counties to issue these bonds so that they could purchase the areas around military installations if necessary. Additionally, cities and counties could purchase the land to construct roadways, utilities, or other infrastructure that protects or promotes the mission of the military installation. The city or county could pledge to increase property taxes for the area in order to repay the bonds or notes. Since the enabling legislation for this amendment did not pass in the legislature, this amendment would only grant authority to the legislature to file legislation making this change in future sessions.

Supporters say Proposition 1 is necessary to grant clear, specific authorization for cities and counties to buy these bonds and notes. Proposition 1 would allow cities and counties to address a growing need to protect military installations from encroachment by preventing or limiting development of the surrounding area. Texas is home to numerous military installations, and in some areas, commercial and residential development has moved closer and closer to the facilities, resulting in problems for both the military facilities and those involved in the development.

Opponents say while protecting military bases is a worthy goal, cities and counties should not be given another reason to increase property taxes. Higher property taxes used to finance bonds to purchase land or build infrastructure could overburden property owners who already carry a heavy load.

Proposition 2: Requiring Appraisal of Residence Homesteads Based Solely on Their Homestead Value

The proposition will read: “The constitutional amendment authorizing the legislature to provide for the ad valorem taxation of a residence homestead solely on the basis of the property’s value as a residence homestead.”

Supporters say the constitutional requirement that property be taxed in proportion to its value has all too often meant that county tax appraisers have valued property based on its “highest and best use” rather than on its current use. For example, a residential property in or near a commercial district may be valued based on its commercial potential even though it currently is being used as a residence. Proposition 2 and its enabling legislation would require that the market value of a residence homestead be determined by its value as a residence homestead, regardless of whether that is the highest and best use of the property.

Opponents say Proposition 2 would arbitrarily move the property appraisal process further away from a true valuation of property according to its worth. According to some estimates, allowing residential homestead property to be valued based solely on its residential use and exempted from a highest and best use valuation would reduce taxable property values, thereby reducing local tax revenue and requiring a local tax increase or spending cuts to offset the revenue loss. When school districts’ property values per student are lower, the state must provide additional funding to these districts under the Foundation School Program’s equalization formulas. The state cannot afford to increase its obligations in this manner, especially when state finances are expected to be spread thin over the next few years.

Proposition 3: Allowing State Enforcement of Uniform Property Appraisal Standards and Procedures

The proposition will read: “The constitutional amendment providing for uniform standards and procedures for the appraisal of property for ad valorem tax purposes.”

Proposition 3 would remove the current constitutional requirement that administrative and judicial enforcement of uniform standards and procedures for property appraisal originate in the county where the tax is imposed. Instead, the legislature would be granted authority to design and create the standards and procedures, so that they do not vary from county to county.

Supporters say that since property owners across the state have seen large increases in the appraised value of their property, the often inequitable increase can be attributed to the differing local appraisal practices and methods across different districts. The state has been left with little meaningful supervisory or administrative power over the standards and methods that local appraisal districts use to value property. Property located in one Texas county should be appraised in the same manner and according to the same rule as similar property located in another Texas county.

Opponents say that Proposition 3 is unnecessary since the state already exerts influence over the appraisal standards through training provided by the state Comptroller’s office and through the comptroller’s annual property tax study. Additionally, opponents worry that Proposition 3 could lead to a loss of local control since county appraisal districts know their local markets and economic realities better than state officials do. Enforcing standards at the state level could impose a one-size-fits-all solution that might not produce the most accurate appraisals for each local district.

If you have questions regarding any of these constitutional amendments or the upcoming election, I invite you to contact my district office at (214) 370-8305 or my capitol office at (512) 463-0244. Please free to email me as well at, and be sure to include your name and full address. I look forward to hearing from you.

The Texas House Research Organization